Investor mood matters.

Over the past month, we’ve seen five sharp stock market declines – and five rebounds, reported Charles Riley of Bloomberg. He pointed out that market declines often go hand-in-hand with a change in the economic outlook, but that’s not the case this time. The economy appears to be doing reasonably well.

Merry Christmas! 

Over the past year, financial markets reminded all of us that progress is rarely linear. As markets fluctuated higher and lower, one truth remained constant – building wealth is the result of diversification, discipline, and thoughtful planning.

There were bearish undercurrents in the bullish sea.

While there are many reasons to be optimistic about the long-term prospects for U.S. stocks, investor concerns about artificial intelligence (AI) spending and the possibility of a market correction roiled markets last week.

Like walking on cobblestones…

If you’ve ever walked down a road paved with cobblestones, you know the uneven surface can be challenging. Today, financial markets are paved with a variety of challenges and concerns. A recent survey from Charles Schwab found that its clients remain

Stock markets celebrated, but bond markets were cautious.

Last week, the Consumer Price Index (CPI) showed that inflation for September was lower than economists had anticipated. Both headline and core inflation (the latter excludes volatile food and energy prices) rose 3.0 percent year over year.

Emotions were running high in financial markets.

You may recall the week before last ended with the Standard & Poor’s (S&P) 500 Index falling more than two percent after a flare-up in the trade war between the United States and China. It marked the end of the longest streak of trading days without a move of one percent or more since 2020, wrote Connor Smith of Barron’s.

It was a stellar quarter for investors.

The last three months have delivered stock market gains amid signs the economy might not be doing as well as previously thought. Here’s what we saw:

The economy is all right.

Last week, revised economic figures showed the United States economy grew faster from April through June than previously thought. The upward revision was primarily due to a revised estimate for consumer spending over the period, according to Connor Smith of Barron’s.

The bulls were running.

Last week, investors rejoiced after the Federal Reserve Open Market Committee (FOMC) lowered the federal funds rate by a quarter percentage point. Major U.S. stock indexes set new record highs.

What are your expectations for inflation?

Inflation occurs when the prices of goods and services increase. Last week, the Consumer Price Index (CPI) showed that inflation moved modestly higher from July to August. Prices increased 2.9 percent, year over year, remaining above the Federal Reserve’s long-term goal of 2 percent inflation. Overall, prices increased 0.4 percent, month over month, from July to August.

Was the jobs report good news or bad news for the stock market?

In financial markets, sometimes bad news is good. It looked like that might be the case last week. On Friday, the Employment Situation Summary was released. It showed U.S. businesses added just 22,000 jobs in August – well below expectations. Economists polled by Reuters had predicted 75,000 new jobs would be added. The unemployment rate ticked higher, moving from 4.2 percent to 4.3 percent.

Will the bull market in stocks continue?

There is always a diversity of opinion about whether stocks are headed higher or lower. Last week, investors were feeling more bearish than bullish about where the stock market may be headed over the next six months. The American Association of Individual Investors (AAII) Sentiment Survey showed:

Will the Fed lower rates?

Last week, in a much-anticipated speech, Federal Reserve (Fed) Chair Jerome Powell said, “In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside—a challenging situation…Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

Was inflation higher, lower, or steady?

Perspective has a tremendous influence on how we perceive the world around us. If you saw any three-dimensional chalk drawings on sidewalks this summer, you understand how perspective affects understanding. When seen from one direction, a chalk drawing looks flat. When seen from another, a winged dragon surges from a hole in the pavement.

U.S. companies have been hitting it out of the park!

Earnings season happens four times every year. It’s the period of time when publicly traded companies report how they performed during the previous quarter. So far, in aggregate, the companies in the Standard & Poor’s (S&P) 500 Index have delivered solid results for the second quarter of 2025.

Fast as a snail.

In July, the weather in Norfolk, England, was perfectly rainy as Bilbo Sluggins won the World Snail Racing Championship with a time of two minutes and 11 seconds. Fans and competitors traveled from the United States, South Korea, and France for the competition.

How fast will an AI-powered economy grow?

Global economic growth has not always been robust. Until the 1700s, economic growth averaged about 0.1 percent per year and was closely tied to population growth. “Bigger harvests allowed more mouths to be fed; more farmers allowed for bigger harvests,” reported The Economist. Eventually, better-nourished people had ideas about how to improve their lives, and economic growth edged higher.

This is not the inflation you’re looking for…

In general, everyone who buys goods or services in the United States would prefer to see prices trend lower – and that’s what happened in the earlier part of this year. Over the last couple of months, though, inflation has begun to creep higher.

Are financial markets too complacent?

In Aesop’s fable, The Boy Who Cried Wolf, a young shepherd repeatedly raises a false alarm. Eventually, the people in his village ignore his warnings. When a wolf appears, the villagers pay no attention to the boy’s cries, confident that “nothing ever happens”.

Major U.S. stock indexes moved to new highs last week.

In a remarkable recovery from April’s double-digit downturn, the Standard & Poor’s (S&P) 500 Index raced to a new record high last week, and so did the Nasdaq Composite Index (Nasdaq).

Investors are taking it all in stride.

As Israel and Iran exchanged missile strikes last week, stock markets in the United States remained relatively steady, reported Michael Msika and Phil Serafino of Bloomberg.

Consumers were feeling cautiously optimistic.

When people talk about the United States economy, they’re usually referring to gross domestic product (GDP), which is the value of all goods and services produced in here. For the first quarter of this year, U.S. GDP was nearly $30 trillion. That’s a huge number.

Nobody likes to balance the budget.

Some pundits said Moody’s rating downgrade of U.S. Treasuries was a nothing burger. After all, the rating change didn’t provide investors with any new information. Moody’s was the third rating service to lower U.S. government bond ratings. S&P Global downgraded U.S. Treasuries in 2011, and Fitch Ratings followed suit in 2023.

Last week, the U.S. stock market showed why it’s a good idea to stay invested through bouts of volatility.

Major U.S. stock indices notched sizeable gains as investors celebrated a trade truce with China and better-than-expected inflation numbers, while brushing off a tepid consumer sentiment reading. Here’s what happened...

The winds of uncertainty are blowing, and the waters are choppy.

In recent weeks, United States stock markets saw steady gains, recovered from the April downturn as investors set aside uncertainty,” reported Connor Smith of Barron’s.

American companies did well in the first quarter.

During earnings season, publicly held companies tell investors how they performed during the previous quarter with a particular focus on earnings, which reflect company profits.

How’s everybody feeling?

If you said, “Not great,” you’re not alone. There is no shortage of negative sentiment today. Many people – from consumers to small business owners, to investors – are feeling less optimistic. Here’s the data.

As the market turns...

When investor preferences shift and money flows from one sector, industry, investment style or geographic region into another, it is called a market rotation.

All eyes on the bond market.

The scale of the tariffs introduced by the administration shocked investors, sparking a roller coaster of a week for stock markets. Last week, U.S. stocks...

“If you can keep your head when all about you are losing theirs…”

The advice offered by Rudyard Kipling’s poem “If—” resonated last week. A sharp escalation in trade tensions sparked a stock market downturn despite news that the United States economy created far more jobs in March than economists had expected, reported Lucia Mutikani of Reuters.

Risk-on. Risk-off.

If you read the financial press, you may have seen the terms “risk-on” and “risk-off”.  When investing, there is a risk-return spectrum. Stocks typically have higher risk and higher return potential than high-quality bonds. High-quality bonds have lower risk and lower return potential than stocks, although they typically have higher risk and higher return potential than cash.

The market whisperer…

Last week, the Federal Reserve (Fed) left the federal funds rate unchanged, and Fed Chair Jerome Powell soothed markets. He explained that conditions in the labor market were broadly in balance and inflation had eased significantly over the past two years. Overall, the possibility of recession, while rising, remained low.

A correction and a bounce.

Last week, the Standard & Poor’s (S&P) 500 Index moved into correction territory. The Nasdaq Composite Index (Nasdaq) was already in a correction, and the Dow Jones Industrial Average (Dow) was close, reported Paul R. LaMonica of Barron’s.

What do weather and investing have in common?

From 1991 to 2020, the average temperature of the United States was 54.7° Fahrenheit. Of course, that doesn’t mean the temperature in every state on every day was 54.7°F. The weather varied dramatically from place to place and month to month.